Ariel Turgeman, manager of the theatre being built in Ariel, a West Bank settlement, which has prompted a boycott by Israeli actors. Photograph: Ronen Zvulun/Reuters

Dozens of Israeli actors, playwrights and directors have signed a letter refusing to take part in productions by leading theatre companies at a new cultural centre in a West Bank settlement, prompting renewed debate over the legitimacy of artistic boycott.

More than 60 have joined the protest over plans by Israel's national theatre, the Habima, and other leading companies to stage performances in Ariel, a settlement 12 miles inside the West Bank. The letter, to Israel's culture minister, Limor Livnat, says the new centre for performing arts in Ariel, which is due to open in November after 20 years in construction, would "strengthen the settlement enterprise".

"We want to express our dismay with the intention of the theatres' managements to perform in the new auditorium in Ariel and hereby declare that we will refuse to perform in the city, as in any other settlement." Israel's theatre companies should "pursue their prolific activity inside the sovereign territory of the state of Israel within the boundaries of the Green Line".

Livnat said the boycott would cause divisions in Israeli society: "Culture is a bridge in society, and political disputes should be left outside cultural life and art. I call for the scheduled performances to be carried out as scheduled in Ariel and all over the country, as each citizen has the right to consume culture anywhere he chooses."

Israel's prime minister, Binyamin Netanyahu, said the country was under attack by the international community – including economic, academic and cultural boycotts – and "the last thing we need at this time … is a boycott from within".

The Habima, Cameri, Beit Lessin and Be'er Shiva theatre companies issued a joint defence of their plans, saying they "will perform in any place where there are theatre-loving Israelis, including the new cultural centre in Ariel. We respect the political views of our actors, but we'll make sure that the best of Israeli theatre will get to Ariel". The four companies, plus another two – the Khan and the Haifa – which have also agreed to stage productions in Ariel, all receive state funding.

Ron Nachman, the mayor of Ariel, said: "These actors get salaries from the government, which is sponsoring their theatres. You cannot take the money from the government and then decide your own policies. That is not integrity or honesty. If they disagree [with performing in Ariel], they should resign."

It was not clear how many of the signatories were listed for planned performances in Ariel. Yousef Swaid, who is appearing in A Railway To Damascus, a production scheduled to be staged in Ariel, told Channel 1 television: "Settlers and settlements are not something that entertain me, and I don't want to entertain them." Rami Heuberger, who is not listed, said: "As a stage actor, it is a very, very problematic issue, and I think that so long as settlements are a controversial issue that will be discussed in any negotiations [with the Palestinians], I should not be there."

Gideon Levy, a leading liberal Israeli commentator, backed the actors' stance. "Yes, there is a difference between legitimate, sovereign Israel and the areas of its occupation," he wrote in today's Haaretz, which first reported the story. ". "Yes, there is a moral difference between appearing here and appearing there in the heart of an illegal settlement … built on a plot of stolen land, in a performance designed to help settlers pass their time pleasantly, while surrounded by people who have been deprived of all their rights."

The Yesha Council, which represents settlers, said the actors' letter had been signed by "army evaders and anti-Zionist leftwing activists".

The actors' letter follows the refusal of some international artists to perform in Israel because of its occupation of the Palestinian territories. Earlier this summer, Elvis Costello cancelled concerts in Israel, citing the "intimidation, humiliation or much worse on Palestinian civilians in the name of national security". The Pixies, Gil Scott Heron, Santana and Klaxons have also withdrawn from performances.

Ariel, home to almost 20,000 people, was founded in 1978 deep in the West Bank. Israel wants it to remain on its side of any border resulting from peace negotiations with the Palestinians. All settlements on occupied territory are illegal under international law.